MUMBAI: Tata Sons’ annual general meeting, scheduled for next month, faces a potential roadblock from a quorum requirement in its articles of association (AoA). A key item on the agenda is the reappointment of chairman N Chandrasekaran, who retires by rotation at the AGM.Article 86 of Tata Sons’ AoA requires at least five members to be personally present, including a representative jointly nominated by Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT), so long as they together hold at least 40% of the company’s equity – a threshold comfortably met as the two trusts hold about 66%.But the requirement has become difficult to satisfy after the Maharashtra charity commissioner barred SRTT from holding board meetings over alleged violations of public trust laws.
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Without a board meeting, SRTT cannot participate in jointly nominating a representative with SDTT.
“The effect is a hard veto over the meeting itself. If the Trusts’ nominee is absent, no valid quorum is formed and no business can be transacted, regardless of how many other members are present,” said a lawyer. If the quorum is not met, Article 87 provides for adjournment of the meeting. While the requirement of five members is relaxed at the adjourned meeting, the presence of the Trusts’ representative remains mandatory.The AoA is silent on what happens if the adjourned meeting also fails for want of the Trusts’ representative.At the 2025 AGM, former SDTT and SRTT trustee Mehli Mistry and current SDTT and SRTT vice-chairman Vijay Singh represented the Trusts. While the Trusts can authorise multiple representatives, they are expected to act jointly and exercise their combined majority vote.Tata Sons could, albeit, seek an extension from the Registrar of Companies to hold the AGM before Dec 31. The Trusts could approach the charity commissioner seeking a relaxation of the order, confined solely to enabling SRTT to jointly nominate a representative with SDTT, or petition the Bombay high court for directions.Chandrasekaran’s reappointment as a director is a vital item on the AGM agenda considering his chairmanship depends on his board position and cannot continue without his directorship though his tenure as chairman runs until Feb 2027.Legal views differ on the consequences if the AGM is not held as scheduled. One view is that Chandrasekaran’s directorship could become vulnerable if the company fails to secure his reappointment within the statutory timeline.The opposing view is that because the resolution contemplates retirement at the AGM, and the meeting would stand postponed rather than concluded, his directorship would continue until the AGM is eventually held. The Companies Act does not expressly resolve this scenario, leaving room for interpretation.